deduction u/s 43B

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manoj mahimkar (Querist)
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21 September 2009 Dear member

An assessee had VAT liability of Rs.12.00 lacs as on 31st March 2009. being faced by liquidity problem, it made an application in the month of May 2009 to the concern official of VAT Department for an 12 equal installments. Appplication was considered and the assessee was allowed to pay the amount in 12 equal installment starting from 30th June 2009, the last installment being May 2010.Up to 30 september 2009 it paid Rs. 5.00 lacs. My query is

Will the balance amount of Rs. 7.00 lacs would be disallowed in pursuance to section 43B? Reference to case law would be highly appreciated

Regards

manoj

Rajeev

Rajeev (Expert)
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22 September 2009 manoj , i have not come across a case law , but there is an old circular issued by the board which may be of some help to u

The scope of application of the provisions of section 43B to the sales tax collected but not actually paid under deferral schemes of the State Governments was considered in Board's Circular No. 496, dated 25-9-1987 [Clarification 2], and it was decided that, where the State Governments make an amendment in the Sales-tax Act to the effect that the sales tax deferred under the scheme shall be treated as actually paid, the statutory liability shall be treated as discharged for the purposes of section 43B.

Since the Vat is not paid cos of a deferral scheme by the govt, provided the state govt has made amendments in the sales tax /vat laws . i think this circular will be helpful to u

What if , the state govt has not made any amendments on these lines : - You can contend that since the State is allowing me to defer my liability , the statutory liability is deemed to be discharged for the purpose of sec 43B.

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manoj mahimkar

manoj mahimkar (Querist)
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22 September 2009 Thank you for your valuable guidance

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